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Goodwill and Other Intangible Assets
 12 Months Ended
Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangible Assets
6) GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill and Intangible Assets Impairment Test
We perform a fair value-based impairment test of goodwill and intangible assets with indefinite lives, comprised primarily of television FCC licenses, on an annual basis, and also between annual tests if an event occurs or if
circumstances change that would more likely than not reduce the fair value of a reporting unit or an indefinite-lived intangible asset below its carrying value.

FCC licenses are tested for impairment at the geographic market level. We consider each geographic market, which is comprised of all of our television stations within that geographic market, to be a single unit of accounting because the FCC licenses at this level represent their highest and best use. At December 31, 2020, we had 14 television markets with FCC license book values.

Goodwill is tested for impairment at the reporting unit level, which is an operating segment, or one level below. At December 31, 2020, we had four reporting units.

For our annual impairment test, we perform qualitative assessments for the reporting units and television markets with FCC licenses that management estimates have fair values that significantly exceed their respective carrying values. In making this determination, we also consider the duration of time since a quantitative test was performed. For the 2020 annual impairment test, we performed qualitative assessments for 10 of our television markets and all of our reporting units. For each reporting unit, we weighed the relative impact of factors that are specific to the reporting unit as well as industry and macroeconomic factors. For each television market, we weighed the relative impact of market-specific and macroeconomic factors. Based on the qualitative assessments, considering the aggregation of the relevant factors, we concluded that it is not more likely than not that the fair values of these reporting units and the fair value of FCC licenses within each of these markets are less than their respective carrying values. Therefore, performing a quantitative impairment test was unnecessary.

A quantitative impairment test of FCC licenses calculates an estimated fair value using the Greenfield Discounted Cash Flow Method, which values a hypothetical start-up station in the relevant market by adding discounted cash flows over a five-year build-up period to a residual value. The assumptions for the build-up period include industry projections of overall market revenues; the start-up station’s operating costs and capital expenditures, which are based on both industry and internal data; and average market share. The discount rate is determined based on the industry and market-based risk of achieving the projected cash flows, and the residual value is calculated using a long-term growth rate, which is based on projected long-range inflation and industry projections.

During the second quarter of 2020, based on an assessment of the relevant factors that could impact the fair value of FCC licenses, including the effects of COVID-19, we determined that an interim impairment test was necessary for three markets in which we hold FCC licenses. The impairment test indicated that the estimated fair values of FCC licenses in two markets were lower than their respective carrying values, which resulted from recent declines in industry projections in the markets where these FCC licenses are held, that were further accelerated by COVID-19. Accordingly, we recorded an impairment charge of $25 million to write down the carrying values of these FCC licenses to their aggregate estimated fair value of $216 million. This charge is included within “Depreciation and amortization” in the Consolidated Statement of Operations. Additionally, the estimated fair value of the FCC license in the third market exceeded its carrying value of $53 million by 7%.

For the 2020 annual test, which was performed during the fourth quarter, we performed a quantitative impairment test for the three markets tested during the second quarter, as well as a fourth television market. The impairment tests indicated that the estimated fair values of FCC licenses in the three markets we tested during the second quarter, which had an aggregate carrying value of FCC licenses of $269 million at December 31, 2020, were within 10% of their respective carrying values. The fourth market had an estimated fair value that exceeded its carrying value by more than 20%.
The following tables present the changes in the book value of goodwill by segment for the years ended December 31, 2020 and 2019.
Balance atAcquisitions /ForeignBalance at
December 31, 2019(Dispositions)CurrencyDecember 31, 2020
TV Entertainment:
Goodwill$17,615 $(113)
(a)
$— $17,502 
Accumulated impairment losses(13,354)— — (13,354)
Goodwill, net of impairment4,261 (113)— 4,148 
Cable Networks:
Goodwill10,691 28 53 10,772 
Accumulated impairment losses— — — — 
Goodwill, net of impairment10,691 28 53 10,772 
Filmed Entertainment:
Goodwill1,593 99 
(b)
— 1,692 
Accumulated impairment losses— — — — 
Goodwill, net of impairment1,593 99 — 1,692 
Total:
Goodwill29,899 14 53 29,966 
Accumulated impairment losses(13,354)— — (13,354)
Goodwill, net of impairment$16,545 $14 $53 $16,612 
(a) Amount reflects the disposition of CMG.
(b) Amount relates to the acquisition of Miramax.
Balance atAcquisitionsForeignBalance at
December 31, 2018(Dispositions)CurrencyDecember 31, 2019
TV Entertainment:
Goodwill$17,618 $(3)$— $17,615 
Accumulated impairment losses(13,354)— — (13,354)
Goodwill, net of impairment 4,264 (3)— 4,261 
Cable Networks:
Goodwill10,234 451 
(a)
6 10,691 
Accumulated impairment losses— — — — 
Goodwill, net of impairment10,234 451 6 10,691 
Filmed Entertainment:
Goodwill1,593 — — 1,593 
Accumulated impairment losses— — — — 
Goodwill, net of impairment1,593 — — 1,593 
Total:
Goodwill29,445 448 6 29,899 
Accumulated impairment losses(13,354)— — (13,354)
Goodwill, net of impairment$16,091 $448 $6 $16,545 
(a) Primarily reflects the acquisitions of Pluto Inc. and Pop TV.
Our intangible assets were as follows:
Accumulated
At December 31, 2020GrossAmortizationNet
Intangible assets subject to amortization:
Trade names$249 $(123)$126 
Licenses168 (50)118 
Customer agreements120 (97)23 
Other intangible assets251 (169)82 
Total intangible assets subject to amortization788 (439)349 
FCC licenses2,416 — 2,416 
International broadcast licenses27 — 27 
Other intangible assets34 — 34 
Total intangible assets$3,265 $(439)$2,826 
Accumulated
At December 31, 2019GrossAmortizationNet
Intangible assets subject to amortization:
Trade names$404 $(171)$233 
Licenses159 (38)121 
Customer agreements119 (92)27 
Other intangible assets255 (146)109 
Total intangible assets subject to amortization937 (447)490 
FCC licenses2,441 — 2,441 
International broadcast licenses25 — 25 
Other intangible assets34 — 34 
Total intangible assets$3,437 $(447)$2,990 
Amortization expense was as follows:
Year Ended December 31,202020192018
Amortization expense (a)
$85 $76 $50 
(a) For 2020, amortization expense includes an impairment charge of $25 million to write down the carrying value of FCC licenses, and was recorded within the TV Entertainment segment. For 2019, amortization expense includes an impairment charge of $20 million, which reduced the carrying value of broadcast licenses in Australia to their fair value, and was recorded within the Cable Networks segment.

We expect our aggregate annual amortization expense for existing intangible assets subject to amortization for each of the years, 2021 through 2025, to be as follows:
20212022202320242025
Future amortization expense$45 $41 $39 $31 $27